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The set of over 11.5 million secret files from the Panamanian law firm Mossack Fonseca exposed high-level politicians in Latin America and the Middle East for hiding millions of dollars in tax havens. | Photo: Reuters

The “Panama Papers” have shown how corporations, wealthy individuals and politicians have systematically hidden assets in more than 21 offshore jurisdictions.

Last year's bombastic financial record leak of a Panama-based law firm, known as the “Panama Papers,” has resulted in calls for the country’s lawmakers to impose greater monitoring of financial and banking institutions.

Juan Pablo Bohoslavsky, a United Nations expert on foreign debt and human rights, stated on Wednesday that greater reforms would allow parties to prevent and denounce tax fraud, rather than facilitating or taking advantage of them.

"The main component of illicit cash flows at the global level is tax fraud. These funds, which circulate and are deposited in the shadows of the financial and corporate systems, consolidate poverty and inequality in the world," Bohoslavsky emphasized during a conference.

UN News questioned Bohoslavsky about lax or nonexistent tax regulations and if these factors gave Panama the appearance of being a “fiscal paradise.” In his response, Bohoslavsky noted that companies and wealthy people opt to do business in one country or another based on their tax structure.

"The most onerous tax evasions must be severely punished within the framework of a comprehensive strategy covering all dimensions of tax fraud."

He added that evasions consolidate poverty and inequality in Panama because it hinders investments in social programs and resource services while preventing public spending on infrastructure and development projects.

The “Panama Papers” have shown how corporations, wealthy individuals and politicians have systematically hidden assets in more than 21 offshore jurisdictions. The set of over 11.5 million secret files from the Panamanian law firm Mossack Fonseca exposed high-level politicians in Latin America and the Middle East for hiding millions of dollars in tax havens.